Business is a paradoxical … business. Take company invoices – on average, they’re paid within 47 days in Denmark – which sounds like a long time, right Well, actually that’s the fastest rate in the EU!
And what about the banks. Their customer satisfaction levels are at an all-time low, but they’re making record profits! While the construction sector is booming, but has a record number of bankruptcies!
Somehow it feels like all of this should be related. Are the construction companies not being paid on time and incurring the wrath of the banks? Let’s take a look.
High level of trust
According to a report from credit insurance company Euler Hermes, the average time it takes for a Danish company to receive payment for an invoice is 47 days – 19 days less than the global average, one day less than in 2016 and the best in the EU.
Some sectors had higher averages than others – for example supply (83 days), machinery (64) and the technical sector (58). Denmark finished comfortably ahead of Nordic rivals Finland (50), Norway (57) and Sweden (57), and Euler Hermes attributed its ranking to “a high level of trust”.
Keep it for rainy day
Denmark’s banks made a profit of 40 billion kroner in 2017 – a 20 percent rise on 2016 – with over 65 percent of the profit, some 27.1 billion, coming from fees. The country’s mortgage lenders, meanwhile, made a profit of 8.1 billion kroner – up 12.6 percent on 2016.
The Financial Supervisory Authority hailed the results as the best since the build-up to the Financial Crisis, but cautioned the banks not to give too much away in dividends and to set aside funds in case of a downturn.
Demand is sky-high
In May, some 105 construction companies went bankrupt – a surprising figure given the number of contracts and demand for workers in the sector, according to Andreas Fernstrøm from Dansk Byggeri. In the first five months, there were 383 bankruptcies – 26 percent more than in 2017.
Normally, there are 200-400 bankruptcies a year, but according to Fernstrøm there could be as many as 800 in 2018. The figure for May was the second highest monthly total since Danmarks Statistik started compiling figures a decade ago.